Will Twittervision Transform US TV Advertising?

No doubt about it. Conventional television and the social powerhouse Twitter have become unlikely bedfellows with audience tweets driving programing and TV elevating Twitter use. That’s all good for Twitter. The social networker stands firmly on the ground between the brands that spend $70 billion in TV advertising annually in the US and the broadcast shows under pressure to drive ratings.

Picture the 32 million people who tweeted about shows in the last year, interacting with a community of viewers moment to moment, while indirectly telling TV producers what they think of casting decisions, characters and plot twists. Tweets under #gladiators, for example, have made ABC’s hit, Scandal, a social networking “phenom” with the show trending for days after each episode. Tweets drive viewership and the reverse, and thanks to the television ratings giant Nielsen, we have some proof of it.

Late this past summer, Nielsen announced research findings that provided evidence for the relationship between the size of a live broadcast TV audience and the Twitter conversation related to it. In other words, Twitter chat about a TV show can drive higher viewership in live broadcast. The Twitter Causation Study analyzed trends in Nielsen’s “live TV ratings and tweets” for 221 broadcast primetime program episodes using Nielsen’s SocialGuide. The volume of tweets caused significant changes in television viewership among 29 percent of episodes. And live TV ratings had impact on tweets for 48 percent of the sampled episodes. Business Insider reported that 40 or more percent of US mobile audiences browsed social media on tablets or smartphones while watching TV. And, also big news for the industry, Nielsen just last week announced it will begin to track television viewing on mobile devices in 2014 so that the shows what we watch on smartphones and tablets count in its television ratings.

Yet, with this growing amount of information, we still have more questions than answers when it comes to ways that digital is upending the traditional roles that broadcast media have played in our lives. How do broadcast programming, social media and marketing promotions interact to influence Nielsen ratings? Can we predict TV ratings based on social-media engagement to improve viewership? How can broadcasters make sure their ad revenue isn’t highjacked by “second screen” tablets and smartphones?

What we are seeing is the dynamic convergence of multiple channels of content consumption and social engagement in media and entertainment. That’s made content, marketing and advertising decisions infinitely more complex. It’s a clear signal to media and entertainment companies to get much smarter about the interrelationship and impact of all digital channels on audience metrics:

Who watches what screen and when? Social media, in particular Twitter, has helped the beleaguered live television show. Sharing Twitter communities encourages viewers to watch live television with its advertising, rather than delaying viewing using DVRs or watching streaming versions. Among the many questions to be answered are those related to the demographics for audience behaviors. What are the characteristics of viewers watching live and tweeting, versus those who are more likely to watch streamed or taped versions of shows? What ways help to ensure that live viewers will also watch commercials?

Are we ready for a dynamic, real-time advertising market? Ad rates are generally established based on the Nielsen ratings of shows for television. In the future, however, the advertising model might change drastically with rates fluctuating dynamically based on TV viewership and social media activity from moment to moment − in real time. We have the data and analytics technologies to create a market of this extraordinary sensitivity. In the airline industry, yield management provides for continuous changes in seat pricing based on supply-and-demand. In the media and entertainment industry, a new advertising model could be based on real-time “demand” reflecting moment-to-moment digital engagement and TV audience reach.

What factors make it possible to make forecasts that support revenue models?Nielsen and SocialGuide research earlier this year confirmed that Twitter chatter about TV shows is directly related to viewership. When Twitter volume went up 8.5 percent for premier episodes, according to Nielsen, program ratings rose 1 percent among 18-34 year olds. When Tweets were up 14 percent, viewing among 35-49 year olds went up that same amount. Understanding these types of correlations − or levers of change − makes it possible to apply predictive analytics to TV and social advertising markets. I foresee a time when we use quantitative models based on such correlations to support options pricing for ads. Predictive analytics can reveal the most likely outcomes based on movement of factors that influence size and type of audience and ratings.

There’s no question that consumers are driving the bus with the interactive power of social. But it works two ways. Media and entertainment companies have the opportunity to get aligned with their audiences as never before. It’s a conversation with two-way benefits for those who are listening.

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GroupM predicts that global ad spend will top $547 billion next year, up from $524 billion this year. While television will still capture the biggest share of that 12-figure pie (41%), digital's share will grow from 31% to 33%.